Wednesday, December 22, 2004

How high is high enough?

Not surprisingly energy banker Matt Simmons thinks energy prices need to be much higher. In fact, he has a number in mind: $182 a barrel for oil. (I spoke with Simmons earlier this year for this story.) The reason he thinks the number needs to be very high is so that two things will happen: 1) Energy companies will commit huge amounts of capital to exploration to find new reserves and build new infrastructure and 2) alternative energy sources will become attractive enough to bring vast new investment into them. He reasons that this would go a long way toward creating the needed energy transition. To watch what Simmons has to say on this and other topics, click here for a video interview. The discussion of the need for high prices is toward the end and includes a call for much greater transparency from energy companies as well.

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